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This morning, we released our interim report for Q2 and the first six months of 2014.
While I am pleased with the profitability improvement in our core business, strengthening our performance in Chile is a key priority for 2014, which I expect will yield margin improvements this year. Divestments and closures that we have completed during the past year had a significant impact on our reported revenue. While profitability enhancement is currently our top priority, our goal is to continue growing revenue at least in line with overall market growth.
These are the key highlights of our report:
- Divestments and closures had a significant impact on reported revenue in the quarter
- EBIT margin in core CRM business improved by 0.9 percentage points in Q2 2014, from 1.6% to 2.5%, excluding the one-time cost for the re-domiciliation
- Strengthening performance in Chile is a top priority for 2014
- Subject to shareholder approval, Transcom will carry out a re-domiciliation to Sweden this year, given the benefits of such a move for the Group and its shareholders.
On Friday, April 25, Transcom released its interim report for the first quarter of 2014.
I am pleased with the progress we are making in terms of enhancing Transcom’s performance, and our financials for the first quarter confirm the positive development. Our focus for 2014 is to continue to improve Transcom’s financial results. While our goal is to continue to grow revenue at least in line with the overall market, our primary focus for the year is clearly to further strengthen our margins. In this context, we have formulated three key priorities for 2014: improving results in North America through increased efficiency and business development, strengthening operational performance in the North Europe region, and driving efficiency and growth in Latin America.
As usual, we met with some investors during the day to discuss the results and Transcom’s plans going forward. This time, we also did a sales briefing for a group of brokers at a major bank. Feel free to have a look at the presentation we used below, or contact me directly with any questions.
Last week, Transcom’s President & CEO, Johan Eriksson, CFO Pär Christiansen and myself visited London for an investor roadshow. We met with five large fund managers, two of whom have already invested in Transcom shares.
Some were quite familiar with the company, while others were taking a first look. For those that were not as knowledgeable about the industry, we had prepared some material to support a discussion about Transcom’s business model (section 2 in the presentation below). In Transcom’s 2013 annual report, due to be published later in April, you will find more detailed information about the industry and how Transcom adds value.
We recently spent a couple of days in meetings with investors and analysts. Johan Eriksson, Transcom’s President and CEO, talked about our current situation, performance and focus areas going forward.
A particular focus area this time was the different pricing models used by Transcom. The context was the recent performance in our North region, where the business model mix that we currently use is more exposed to the accuracy of volume forecasts, relative to other regions. We are currently working to improve the balance of pricing models used in all regions. It is clearly useful for investors to develop an understanding of the business dynamics associated with the major types of contracts we use with our clients, so we will surely revisit this topic.
Feel free to have a look at the presentation below, or contact me directly with any questions you may have.